With capital-intensive energy projects balancing strict timelines and budgetary constraints, investing in unused, surplus oil and gas equipment at an affordable price can be the crucial lever of a project’s viability.
Repurposing surplus equipment can deliver significant cost savings, improve operational efficiency through faster deployment and support sustainability by reducing waste and extending asset life.
Equipment purchases – especially compressors and process equipment – are one of the highest costs for oil and gas projects, and sourcing equipment surplus to site requirements can have considerable positive effects on a company’s bottom line.
The global oil and gas equipment market is forecast to reach about $175 billion by 2032, expanding at a 3.9 per cent compound annual growth rate.
Dominant demand drivers include deepwater drilling and production from shale gas reserves in the United States and China, along with increased drilling and exploration activities in the Middle East and West Africa.
As it is a global market, understanding the nuances of the region where the transaction is taking place is critical, since demand and prioritised equipment can vary between different parts of the world.
These nuances are particularly important for sellers, as choosing the right market determines profit margins, speed of equipment turnover, regulatory compliance costs, and logistics and delivery success.
The Middle East is the largest consumer of upstream oil and gas equipment, and project expansions – at least prior to the recent Iran conflict – are driving demand for drilling rigs, subsea systems, pipeline equipment, and refinery gear.
Government tenders dominate purchases and require strict compliance with local standards, such as SASO for Saudi Arabia.
North America is a highly regulated, high-volume market with advanced technology adoption in shale and LNG and consistent demand for digital oilfield equipment, sensors, SCADA systems, and automation gear.
A specific regional characteristic of the North American equipment market is the high expectation for customer support and warranties, with requirements of various certifications (API, ANSI, UL, etc).
West Africa is emerging as a significant region due to ongoing aggressive oilfield expansion, such as Nigeria’s deepwater projects and Ghana’s Jubilee field.
Those countries, along with Angola and Senegal, have a strong demand for wellheads, control valves, compressors, and rig parts.
There are several challenges to operating in an emerging market such as West Africa, including complex customs processes, infrastructure gaps, and a preference for vendors with a local presence.
The Asia Pacific region is a diverse market with different demands and a large consumer base, encompassing countries such as China, India, Indonesia, Malaysia, and Australia.
Key demand trends include upstream drilling rigs and LNG infrastructure (India), upgrading old oilfield equipment (China), and offshore development driving subsea equipment demand (Australia).
However, duty drawbacks and bilateral trade agreements need to be considered, as well as subregional characteristics, as import laws can vary significantly.
Finally, South America’s market (Brazil, Argentina, and Colombia) has strong potential, but political instability in some areas brings a level of risk.
There is robust demand for subsea, FPSO, and processing equipment from Petrobras projects in Brazil, while a push for LNG development by Argentina’s Vaca Muerta is also creating demand for gas processing equipment and offshore modules.